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Noem Says Marijuana Legalization Will Cost State $4.2 Million Upfront


Governor Kristi Noem says marijuana legalization will cost the state $4.2 million dollars upfront.

During her annual budget address, she called the vote to approve recreational and medical marijuana and place it into the state constitution quote “disappointing.” Noem says there are significant costs associated with both recreational and medical marijuana.

Slide from Dec 8th's state budget address.

“I want to be very clear, we will not see any revenue from marijuana until April of 2022,” Noem says. “Though, it could be longer than that.”

That’s the deadline for the Department of Revenue to establish rules for taxable sales of marijuana. According to estimates by the Legislative Research Council, a 15% tax on marijuana sales will generate nearly $30 million in revenue by fiscal year 2024. That revenue goes to offset costs to the state.

The ballot question approved by 54% of South Dakota voters in November is currently being challenged in court on constitutional grounds.

-Contact SDPB reporter Lee Strubinger by email.